Staying with Novopay is the right decision…

The Ministry of Education had only two options regarding their payroll system – to stay with Talent2’s Novopay or to switch to their previous provider Datacom.

Steven Joyce announced on 7 May that the government would stay with the Novopay system for the time being, but that he would continue to monitor the situation on a daily, weekly and monthly basis.

From all recent accounts the tide is changing for Novopay. Mr Joyce commented that, “three out of the last four pay periods have had a reported error rate of less than 0.5% – which we have been advised by our independent technical reviewers is a reasonable error rate for a stable system.” In fact the latest PwC Pay Period 3 figures have registered the best result yet for the Novopay system, with an error rate of only 0.26% (well below the reviewer’s accepted parameters of 0.5-1%).

While still quite guarded, key stakeholders and school representatives agree with the government’s decision to stay with Novopay and are starting to report positive changes to the system. “It has taken a while, but Steven Joyce is putting every effort into fixing it and now you can see all that action going on,” Nelson Principals Association president Barbara Bowen said (Nelson Mail, 8-5-2013).

Tom Parsons, president of the Secondary Principals’ Association, concedes that Novopay has a serious image problem to overcome “but the improvement had been remarkable.” He also explained that the improved system of today bears no resemblance to what the schools had pre-Christmas. (stuff.co.nz, 8-5-2013)

Mr Joyce has taken a measured and sensible approach, taking into consideration all of the risks, before making the decision to stay with Novopay. “The improvements we have seen in delivering school pay from pay period to pay period and the progress to date in clearing bugs, means it wouldn’t be sensible to make a change at this point. Making a change now would increase the work for payroll administrators in the short-term during the cut-over from where we stand today, not decrease it.” (scoop.co.nz, 7-5-2013)

But was revisiting Datacom ever going to be a viable option? Media reports (about Datacom) back in February 2008, quoted the then New Zealand Principals Federation president Paddy Ford as stating that, ‘‘schools deserve better. It’s a nightmare. We are dealing with unnecessary bureaucracy and huge numbers of errors.” And further in the report, “the latest payroll round – the first of the school term – was filled with errors. A number of schools have not received any pay, and many support staff have been paid the incorrect amounts.”

And this sentiment from a recent article in the Marlborough Express sums up the fact that Datacom was not providing an adequate payroll service for the Ministry and its demise was inevitable, “the previous Datacom system used to pay staff had become too old and had to be replaced.”

There are many risks and uncertainties for a switch at this time back to the Datacom system. This premise was supported by a recent editorial from The Dominion Post, “there are no guarantees that Datacom can seamlessly revive its old system or that it can modernise it any more effectively than Talent2 has been able to implement its system.”

And a review of the publicly released proposal submitted by Datacom to resume the Ministry’s payroll service leaves little confidence and lots of doubt as to their capability to successfully transition to their payroll system. The proposal for replacing Novopay involved a short-term return to Datacom’s old system (using August 2012 data as a base), then reconciling to update to the current database. At its own admission, Datacom’s proposal states that “reconciliation will be difficult and will take a long time” and could not estimate the cost for the reconciliation project because they had “no idea of the size of this at this point.” Another risk highlighted in the proposal was the possible failure of their “legacy system, particularly a software failure.” This is certainly not a confident endorsement from Datacom themselves.

School users have also just spent the last nine months familiarising themselves with the Novopay system – reversing this now will cause more angst and frustration. This is supported by Ross Intermediate Office Administrator Erica Prier, “personally, I’m happy not to have a new system to learn. If I had to go and re-learn all of that it was going to be a pretty big investment of time.” (stuff.co.nz, 8-5-2013)

The next key milestones are the Novopay Ministerial Inquiry, which is due at the end of May, and the review of progress in the Remediation Plan at the end of June.

Novopay still has some challenges ahead, but all current indications are that Novopay is the right choice for the Ministry of Education for now and for the future.